On February 24, 2026, the SEC released a sweeping overhaul of its Enforcement Manual, the internal guide that dictates how the Division of Enforcement conducts an investigation from initial contact through the Wells process and resolution. Manual revisions rarely make news. This one deserves it. Together with the Commission’s March 2025 decision to reclaim control over formal investigative orders, the new Manual changes the practical rules of engagement for any broker-dealer, investment adviser or associated person who receives a call, a letter or a subpoena from the staff. The majority of these changes tilt in favor of the defense, but only for those who recognize the opportunity and act on it.

Executive Summary
This update supplements our April 29, 2026, client alert on Virginia’s data center tax reform. On June 22, 2026, the Virginia General Assembly passed budget legislation (HB 30) that resolved the sales tax exemption dispute that had deadlocked the two chambers since March. The compromise preserves the existing sales tax exemption but imposes a first-of-its-kind energy consumption tax of $0.011 per kilowatt-hour on data center electricity usage, expected to generate up to $600 million annually. Governor Spanberger signed the budget into law on June 30, 2026, ahead of the June 30 constitutional deadline, and the new tax took effect July 1, 2026.

While the retention of the sales tax exemption provides near-term certainty for developers who relied on it, the new energy consumption tax introduces a material operating cost that must be incorporated into financial models. Critically, the tax expires at the end of the two-year budget cycle, and the legislation creates a joint legislative subcommittee to study the broader data center tax issue, signaling that this compromise is a waystation, not a final resolution. In the days following the budget signing, Governor Spanberger also signed a broader package of energy affordability legislation, including new restrictions on data center backup generator emissions, new tools for localities to assess data center impacts, ratepayer protections and legislation to rejoin the Regional Greenhouse Gas Initiative (RGGI).
 

Executive Summary

Virginia’s 2026 General Assembly session produced significant new legislation reshaping the data center development landscape. Of 61 data center-related bills considered, 15 were sent to Governor Spanberger’s desk and 46 will carry over to 2027. The fate of the state’s marquee data center sales tax exemption remains unresolved. Lawmakers returned to Richmond on April 23 for a special budget session aimed at finalizing the state’s approximately $212 billion two-year spending plan, but the session lasted only a matter of hours before legislators recessed without reaching agreement, a result that laid bare significant rifts among the Democratic majorities. Members departed the Capitol without establishing a firm schedule for resuming negotiations, and the two chambers’ respective budget proposals remain separated by more than $1 billion. At a separate reconvened session on April 22, legislators also declined to adopt a number of the Governor’s proposed amendments to high-profile bills addressing energy policy, marijuana legalization and collective bargaining, further highlighting friction within Virginia’s newly unified Democratic government that could complicate fiscal talks going forward. The constitutional deadline for enacting a budget is June 30, and further negotiations are anticipated. This alert summarizes key legislative outcomes, pending measures and market dynamics that data center developers and operators should factor into their investment decisions.

• Tax Deferral Benefits: Section 1031 allows deferral of capital gains income taxes when exchanging interests in real estate, provided the properties are “like kind” and both held for investment or productive use.
• Real Property Requirement: Since 2017, only interests in real property qualify for 1031 exchanges; personal property does not.
• Handling Proceeds: Careful management of exchange proceeds is crucial to avoid taxable gains, especially concerning "boot" and debt discrepancies.
• Strict Timing Rules: Delayed exchanges must adhere to 45-day identification and 180-day closing deadlines.
• Role of Qualified Intermediaries: To prevent constructive receipt of proceeds, a qualified intermediary must manage the funds.
• Legal Guidance: Recent cases emphasize the importance of meeting deadlines and proper documentation to secure tax deferral benefits.

The Virginia Court of Appeals has reversed a 2024 Arlington Circuit Court ruling that struck down Arlington County’s 2023 “Expanded Housing Option” (EHO) zoning amendment and enjoined the County from issuing permits under it. In a September 5 memorandum order, a three-judge panel held that the circuit court erred when it refused to let developer Wilsons Ventures LLC intervene in the residents’ challenge to the EHO. The panel remanded the case so Wilsons Ventures can be added as a party and participate in further proceedings.

Imagine a small, fast-growing tech company preparing to go public in 2025. The leadership team, relying on practices that were standard just a few years ago, drafts generic risk disclosures, leans on flexible governance structures, and assumes that their marketing materials and internal controls will pass muster as they always have. Confident, they proceed only to find themselves facing unexpected SEC scrutiny, delayed approvals, and personal liability risks for their executives and advisors.

Recent legal and policy developments continue to shape the landscape for “Missing Middle” housing initiatives, impacting developers, municipalities, and communities alike. The original alert reporting on the "Missing Middle" can be found by clicking here. 

On March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, issued an interim final rule (the “Interim Rule”) under the Corporate Transparency Act (“CTA”) whereby it (i) significantly revised the statutory definition of “reporting company”, (ii) exempts domestic entities from beneficial ownership reporting requirements, (iii) limits the scope of the CTA to non-U.S. persons, i.e., entities formed under the laws of a foreign country and that are registered to do business in any state or tribal jurisdiction in the United States, and (iv) adds an exemption from reporting, as discussed below, by moving the term “domestic reporting company” to a new exemption.  

On March 2, 2025, the U.S. Department of the Treasury  (“Treasury”) announced that it will not impose penalties, fines, or pursue enforcement actions against U.S. companies, citizens, or their beneficial owners for failing to file beneficial ownership information (“BOI”) reports, pursuant to the Beneficial Ownership Information Reporting Requirements final rule (31 C.F.R. 1010.380) (the “Reporting Rule”), the Corporate Transparency Act (“CTA”) (31 U.S.C. § 5336), even after any forthcoming deadline extensions or changes to the Reporting Rule. Treasury’s announcement follows earlier guidance from the Financial Crimes Enforcement Network (FinCEN) (the Treasury bureau responsible for enforcing the CTA)—which suspended enforcement of the March 21, 2025, filing deadline.
 

On October 25, 2024, Arlington County Court was filled to capacity as Judge Schell delivered his final judgment in the case of Marcia Nordgren v. Arlington County Board. This ruling provided much-needed clarity following the initial oral opinion, which had declared Arlington's Expanded Housing Option ("EHO") zoning and development policy unlawful. 

On September 27, 2024, a Virginia Circuit Court Judge invalidated Arlington's “Missing Middle” zoning policy, which allowed for the by-right construction of up to six dwelling units on properties in districts zoned for single-family residential dwellings. The policy is codified as “Arlington County Zoning Ordinance (ACZO) §10.4 Expanded Housing Option Development” (the “EHO”) and effectively does away with single-family only zoning restrictions. The judge found that the Arlington County Planning Commission violated procedural requirements, failed to consider environmental impacts, and did not account for compliance with state and local tree canopy requirements in its passage of the EHO. As a result of the judge’s ruling, Arlington County cannot issue any more permits under the EHO.
 

Non-compete clauses impact approximately one in five American employees or 30 million people. The Federal Trade Commission (“FTC”) recently proposed a ban on non-compete clauses in employment agreements. On January 11, 2023, Whiteford published an Alert on this proposal, but here’s an update about what you need to know regarding the ban and reports of recent FTC action to enforce these restrictions. 

Companies are now subject to jurisdiction in places that do not have a significant relationship to the dispute.

The Century-old Supreme Court case, Pennsylvania Fire Insurance v. Gold Issue Mining, established the “consent in registration” principle that states can exercise jurisdiction over corporations not headquartered or incorporated in the state as long as they register to do business there. On June 27, 2023, in Mallory v. Norfolk Southern, the Supreme Court held that a Pennsylvania state trial court could exercise personal jurisdiction over a non-Pennsylvania company in a suit arising out of non-Pennsylvania conduct due to this consent. Companies registered to do business in a state can now be sued in that state even when the state has little or no connection to the case.

Update: Assessing ‘Missing Middle’ Housing Policies: Procedural Pitfalls And Policy Implications In Virginia And Beyond

Assessing ‘Missing Middle’ Housing Policies: Procedural Pitfalls and Policy Implications in Virginia and Beyond